Founder of now-defunct Capital Bank, William Ato Essien has pleaded guilty to charges of misappropriation of depositors' funds and other counts of stealing, abetment to stealing, conspiracy to steal and money laundering among others.

This was after the court accepted the terms of agreement reached between lawyers of Mr. Essien and the prosecution to pay a total of GH¢90 million as refund to the state.

He was subsequently convicted on his own plea pursuant to the agreement by the parties.

Prosecution, represented by the Deputy Attorney General, Alfred Tuah-Yeboah explained, having been asked by the judge how both parties arrived at the GH¢90 million amount.

According to him, investigations conducted by the state showed that some 65 million and GH¢35 million belonging to Capital Bank were used by another company; Capital African Group to acquire shares in Capital Bank.

Upon realising this through its investigations, the prosecution said the share acquisition was reversed and the money was retained by Capital Bank.

These amounts formed part of some GH¢192 million the accused persons have been charged with and therefore, the share acquisition was revoked and the amount retained.

The prosecution further noted that the total amount from these two transactions is GH¢100 million and therefore the outstanding amount out of GH¢192 million currently stands at GH¢92 million.

Ato Essien is standing trial with the Managing Director (MD) of the defunct bank, Fitzgerald Odonkor, and the MD of MC Management Services, a company said to be owned by Essien, Tettey Nettey.

The prosecution has accused the three persons of engaging in various illegal acts that led to the dissipation of a chunk of the GH¢620 million liquidity support given to the Capital Bank by the BoG between June 2015 and November 2016.



Court initially rejected GH¢90 million repayment:

The Accra High Court had, prior to this, rejected an amount of GH¢90million by William Ato Essien, after lawyers of same had informed the judge; Justice Eric Kyei Baffour, in the last sitting that the accused person had agreed to pay GH¢90 million as restitution to the state.

The move by Essien was pursuant to Section 35 of the Courts Act, 1993 (Act 459) which allows an accused person to plead guilty and pay restitution to the state in cases in which there had been financial loss to the state.

This was rejected by the judge on the basis that, the money which was obtained by Mr. Essien in 2015 was done when the cedi to dollar exchange rate was GH¢3.79 pesewas and therefore it will be a shortchange for the state if the monies were refunded using the same rate rather than the current GH¢13 with interest.

According to the judge, if he accepted the agreement in its current form, it meant people who had committed crimes would be made to profit from it.

The judge also ruled that the case did not fall under Section 35 of Act 459 because the monies involved did not belong to the state but rather to depositors and shareholders of the defunct Capital Bank.

The court also wondered why Essien wasted the time to go through three years of trial and only agree to pay the money a day before the judgment.

The judge, therefore, adjourned the trial to December 13, 2022 for the prosecution and Essien to come back with a better deal and also convince the court whether the trial was one that fell under Section 35 of Act 459.

Background

Capital Bank was one of the first banks that collapsed after a massive clean-up of financial institutions by the BoG started in 2017.

On August 14, 2017, its licence and that of UT Bank were revoked by the BoG, after the BoG had declared them insolvent.

The BoG allowed the state-owned bank, the GCB Bank, to acquire the two banks in order to protect depositors’ funds and also enable them to stay afloat.

The hurricane that swept through the banking sector due to the collapse of the two banks further heightened in August 2018 when the central bank collapsed five other indigenous banks and merged them into one entity — Consolidated Bank, Ghana.

WA